RBS Quits Treasury's Asset Protection Scheme
RBS has said it will withdraw from a Government insurance scheme set up during the banking crisis to cover its riskiest loans.
The bank said the Treasury had given it permission to opt out of the Asset Protection Scheme (APS) because its payments had reached the minimum £2.5bn.
The programme capped potential losses on almost £300bn of RBS' most toxic assets after the Government spent £45bn bailing it out during the financial crisis of 2008.
The bank, which has not made a claim, said it has reduced these assets by more than 60%.
Leaving the programme will save RBS around £500m a year in future premiums.
Chief executive Stephen Hester said leaving the APS was a "significant milestone" in the recovery of the bank, which is 82%-owned by the British taxpayer.
"The APS has played a valuable role, buying time for the bank as we implemented change from the worrying days of 2009 to create the much stronger institution it is today," he said.
"RBS's capital, liquidity, and funding positions have been transformed in the past three years, so the time is now right for us to exit this scheme."
The Chancellor hailed the move as a step towards returning the state-owned lender to the private sector.
"The Government's strategy remains to return RBS to the private sector when it is value for the taxpayer to do so," George Osborne said. "Today is a step in that direction."
RBS' exit will give the bank a boost after its £1.65bn deal to sell 316 bank branches to Spain's Santander collapsed last week.
Its share price rose more than 2% on opening on Wednesday.